MUNICH—Wolfgang Reitzle, CEO of Linde AG—world’s largest industrial gas company—has brought his opinion forward on the euro debate stating that in the long run Germany would be better off without euro currency.
He still believes that the euro currency could be saved, but he is “not of the opinion that it should be saved at any price,” he stated in an interview with the Spiegel Magazine.
Wolfgang questions the disciplinary conduct of the failing members of the eurozone, stating that they don’t have what it takes to follow through on strict measures set by the European Central Bank (ECB).
“And when we don’t succeed in disciplining the crisis countries, then Germany should exit the eurozone,” said Reitzle.
Germany, with its export economy, relies on the euro currency because it enables smooth transferring of its goods throughout the eurozone without risks of currency exchange fluctuations in every country.
If Germany has its own currency, as was the case with the Deutsche mark before 2001, the currency will most likely become more expensive and stable than other currencies, and it would make the prices of its exports rise. This, in turn, will lower exports, as customer countries would not be able to afford to buy as they do now with a devalued euro. As a result, exports will drop and German companies will produce less thereby creating more unemployment.
In Reitzle’s opinion, Germany will suffer for the first five years after exiting the eurozone due to the lowered export and rising unemployment, but afterward recovery will ensue, as Germany will be forced to become more competitive, which they will achieve based on their hard-work ethic and quality of goods and services.
“In just five years Germany could become stronger than its Asian competitors,” he said.
Regarding Greece, Reitzle doesn’t see any chance of improvement. He thinks that its debt should be completely written off by debt holders. “Not only to 50 or 70, but to the full 100 percent the debts must be written off,” he said.
The situation in Greece is getting worse, as it has problems negotiating its second bailout fund. This bailout fund is critical because Greece must pay 14.5 billion euros in a bond payment on March 20. If the second bailout fund is not received by Greece, it could mean complete bankruptcy and an exit from the eurozone.
At the moment, the euro currency has slumped for the sixth week in a row. It likely will endure further declines now that France and Austria saw their credit ratings downgraded by Standard & Poor’s from AAA to AA+.
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